Three Strikes and You Are Out

The poor performance of the US healthcare system can primarily be attributed to three things. First, the “fee for service” payment model incentivizes providers to provide as many services as possible to maximize reimbursements from insurers, either private or public. Second, the lack of integration of archival and operational information systems undermines the delivery of effective and inefficient services.

I as well as many others have argued that a systems approach to redesigning the system of healthcare delivery would address these issues and transform the system to provide high quality, affordable healthcare for everyone. There appears to be widespread agreement in this. Why then is this so slow to happen? This leads to the third source of poor performance – the orientation of senior leadership of many healthcare providers.

Three examples illustrate this well. In talking with the CEO and CQO (chief quality officer) of a major provider in the southeastern US, with whom we had been working regularly, they commented that the best characterization of their delivery system was “chaos.” We proposed an approach to mapping and improving their delivery processes. The cost would be modest as the proposed team was composed of engineering faculty and graduate students.

The CEO balked at the price. I argued that this would quickly save him much more than the cost of the effort. He agreed with this assertion but, as a former CFO, indicated that he was not willing to spend a single dollar on process improvement. He suggested that we try to find a grant that would pay for this effort. He clearly saw his role as steward of the status quo.

We worked to create an alliance with a major provider in the northeastern US. Meetings and briefings with the CMO (chief medical officer) and his leadership team led to a planned set of initiatives. A process mapping and improvement initiative was agreed upon at modest cost; much less than the instance cited above as we had refined our methods and tools for such an initiative.

Meetings with the department heads associated with this effort led to great enthusiasm, but no progress. Everyone was far too busy to provide access to the information needed to proceed. I suggested that they were not really committed to the project. They apologized profusely and reaffirmed their commitment — but still did not supply the promised information. These leaders were also far too busy stewarding the status quo.

We reached agreement with a major, internationally renown, provider to study human-centered, computer-based systems to support patients, their families, and clinicians in delivery of out-patient services. Funds for this research effort would be provided by an external source. Our initial proposal, with the provider, was not submitted because they could not achieve agreement across various stakeholders by the deadline. We decided to delay submission until the then next round, six months later.

The detailed proposal was developed and ready for submission. A final briefing was scheduled to review the completed proposal three days before the due date. At that point, one of the affected groups complained that they had not been given adequate time to digest and react to the proposal, despite the fact that time with them had been repeatedly requested during proposal development. They were concerned that the proposed effort was much more ambitious than their ongoing effort in this area.

They were also concerned that they were losing control of efforts to improve out-patient services. It was observed that their progress was both modest and slow, due to the demands of their status quo responsibilities. Further, the proposed effort would bring in outside resources and significant external recognition. Nevertheless, the provider leadership involved did not want to antagonize this group. They withdrew from the partnership and the completed proposal was not submitted three days later as planned.

What can be learned from these three experiences? First, the status quo is all consuming. The current way of doing things demands almost all attention and resources. One executive, in a different organization, said, “Bill, you don’t understand. I am far too busy underperforming to have the time to get good at this.” Of course, this is not just the case for healthcare. It is also true for education and government, for example.

Some organizations, however, escape this conundrum. The key ingredient is senior leadership who have a vision of the “to be” organization as well as a clear sense of the path from the “as is” to the “to be.” They communicate this vision and stay closely involved with its pursuit. They are not afraid to ruffle feathers in the process. Such leaders would never be characterized as stewards of the status quo. As a result, their organizations tend to be innovators rather than reluctant followers. Much more of this is needed in healthcare.

So, three strikes and we are out, at least for this inning. If we look at the differences between our successes and failures in pursing change via systems approaches, what have we learned that will help us with our next times at bat? First and foremost, regardless of the technical merits of an idea and the expertise and skills of the team, the full commitment of senior leadership is crucial. We know from extensive studies of a wide range of industries that middle management will not spontaneously transform an enterprise. Second, senior leadership has to explicitly commit to helping overcome pushback from the forces of the status quo. Initially at least, visionary leadership is not the frosting on the cake – it is the cake!

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Stories of Change

My focus in this blog is fundamental change. In particular, I will write about fundamental change of complex organizational systems. The series of entries will report on a 20-year journey working globally with well over one hundred enterprises and several thousand executives and senior managers. I will also provide observations and comments on contemporary news and events.